Texas – December 10, 2009

Contents

What We Did

We reviewed the use of Recovery Act funds in Texas for highway and public housing projects. For descriptions and requirements of the programs we covered, see appendix XVIII of GAO-10-232SP. For these programs we focused on how funds were being used; how safeguards were implemented, including those related to procurement of goods and services; and how results were assessed. State highway projects were selected because they had been underway for several months. The San Antonio Housing Authority was selected because it represents one of the largest public housing authorities in Texas, and received the largest Public Housing Capital Fund grant in the state. In addition, Texas highway and San Antonio Housing Authority projects provided us with an opportunity to review contracts. Contracting procedures were reviewed for three highway projects and one public housing project awarded with Recovery Act funds.

Further, we examined Texas’s recipient reporting, which identifies the estimated number of jobs created and retained by Recovery Act funding. Finally, we surveyed local educational agencies to identify their plans for using Recovery Act funds.

Our work in Texas also included assessing two localities in Texas to review the overall effect of Recovery Act funding on local governments’ budgets, and to describe local Recovery Act programs and projects. We selected the city of Dallas and Denton County because they provide a contrasting perspective concerning the uses of Recovery Act funding by Texas localities. The city of Dallas is the eighth-most populous city in the United States, anticipates receiving significant amounts of Recovery Act funding, and recently reported an unemployment rate higher than the state average. Denton County is one of the fastest growing counties in the United States, recently reported an unemployment rate lower than the state average, and is likely to receive limited amounts of Recovery Act funding.

What We Found

Highway Infrastructure Investment Projects

The U.S. Department of Transportation’s Federal Highway Administration (FHWA) apportioned $2.25 billion in Recovery Act funds to Texas. As of October 31, 2009, FHWA had obligated $1.4 billion and reimbursed $162 million for 181 projects. According to officials, the three highway construction contracts reviewed were competitively awarded at fixed-unit-prices and the contract awards were for less than the state’s estimated contract costs.

San Antonio Housing Authority

Texas has 351 public housing agencies that collectively received $119.8 million in capital fund grants and $21.5 million in competitively awarded grants under the Recovery Act.[2] The San Antonio Housing Authority received about $14.6 million in capital fund grants that it plans to use to make capital improvements to its housing developments. The most expensive project, with an estimated cost of $6.6 million, will completely rehabilitate a development that houses the elderly. Additionally, the San Antonio Housing Authority applied for and was awarded an additional $5.4 million to be used for capital improvements to 13 developments that house the elderly and persons with disabilities.

Education

We surveyed a representative sample of local educational agencies (LEAs) nationally and in Texas about their planned uses of Recovery Act funds. The survey estimates that 20 percent of the Texas LEAs anticipate job losses even with State Fiscal Stabilization Fund funds. The national estimate was 32 percent.

Recipient Reporting

The State Comptroller’s Office took steps to ensure that Texas agencies and institutions reported information accurately and completely for all Recovery Act awards they received. According to officials in the Comptroller’s Office, any errors found were communicated to the state entity for disposition, and the Comptroller’s Office staff monitored the correction or update. In total, 60 agencies and institutions of higher learning submitted 1,131 recipient reports reflecting almost $8.9 billion in Recovery Act awards and over $232 million in expenditures to FederalReporting.gov through October 29, 2009.

Effect of Recovery Act Funds on Local Governments

The city of Dallas anticipates using Recovery Act funding for programs such as public safety and transportation, and is taking steps to ensure Recovery Act funding is spent in compliance with provisions of the Act. Denton County applied for Recovery Act law enforcement grants; however, Denton County decided not to apply for other Recovery Act funding.

[2]Public housing agencies receive money directly from the federal Department of Housing and Urban Development. Therefore, funds awarded to the public housing agencies do not pass through the Texas state budget.